Chapter Contents
1.6 Recent Developments in Manufacturing
Section 1.6/Recent Developments in Manufacturing 27
proportion of the common items used today are based on this technology. Two thirds of the products listed in Table 1.1 are either called electronics products or their func- tion and operation depend on electronics. In this book, the fabrication of integrated circuits is covered in Chapter 33 and electronics assembly in Chapter 34.
Computerization of Manufacturing The fi rst digital computers date from the mid-1940s, but their applications in manufacturing came quite a few years later. In the mid-1960s direct numerical control was developed, in which mainframe com- puters were employed to remotely control machine tools in factories. As computer technology developed, enabled by advances in microelectronics, the cost of comput- ers and data processing was reduced, leading to the widespread use of personal com- puters, not only in the offi ce but also in the factory for tasks ranging from control of individual equipment on the shop fl oor to control of the information required to manage the entire enterprise. The Internet has allowed manufacturing companies to communicate among their own geographically distributed plants and offi ces, and it has also provided access to customers and suppliers around the world. In this book, several aspects of computerization of manufacturing are included in Parts X and XI on manufacturing systems (Chapters 37 and 38) and manufacturing support systems (Chapters 39 and 40).
Flexible Manufacturing During most of the twentieth century, the emphasis in the manufacturing industries in the United States was on mass production to sat- isfy the consumer demands of a rapidly growing population. Mass production is still widely used in the United States and throughout the world, but computerization has enabled manufacturing companies to develop systems that are able to cope with product variations. The reader encountered several instances of this manufacturing fl exibility in Section 1.4.1 in the discussion of production facilities. Cellular manu- facturing and mixed-model assembly lines are two examples of manually operated manufacturing systems that are capable of producing a variety of parts or products without the time-consuming downtime for changeover. The automobile industry, in particular, is designing its fi nal assembly lines so that ever-greater model variations can be accommodated on a single line to meet changing and unpredictable demand patterns. Computerization has also allowed fl exibility to be designed into automated systems, examples of which are the fl exible manufacturing systems discussed in Sec- tion 38.6.
Closely related to fl exible manufacturing is mass customization, which involves a production system that is capable of producing individualized products for each customer. The customer specifi es the model and options, and the product is made to those specifi cations. Mass customization is discussed in Section 38.6.3.
Microfabrication and Nanotechnology Another recent development in manu- facturing, closely related to microelectronics, is the introduction of materials and products whose dimensions are sometimes so small that they cannot be seen by the naked eye. In extreme cases, the items cannot even be seen under an optical micro- scope. Products that are so miniaturized require special fabrication technologies.
Microfabrication refers to the processes needed to make parts and products whose features sizes are in the micrometer range (1 mm 103 mm 106m). Examples include ink-jet printing heads, compact discs (CDs and DVDs), and microsensors used in automotive applications (e.g., air-bag deployment sensors). Nanotechnol- ogy refers to materials and products whose feature sizes are in the nanometer scale
Section 1.6/Recent Developments in Manufacturing 29
(1 nm 103 mm 106 mm 109m), a scale that approaches the size of atoms and molecules. Ultra-thin coatings for catalytic converters, fl at screen TV monitors, and cancer drugs are examples of products based on nanotechnology. The technological and economic importance of microscopic and nanoscopic materials and products is expected to increase in the future, and processes are needed to produce them com- mercially. Chapters 35 and 36 are devoted to these technologies.
Lean Production and Six Sigma These are two programs aimed at improving effi ciency and quality in manufacturing. They address demands by customers for products they buy to be both low in cost and high in quality. Lean production and Six Sigma are being widely adopted by companies, especially in the United States.
Lean production is based on the Toyota Production System developed by Toyota Motors in Japan. Its origins date from the 1950s and 1960s when Toyota began using unconventional approaches to improve quality, reduce inventories, and increase fl exibility in its operations. Lean production can be defi ned simply as “doing more work with fewer resources.”4 It means that fewer workers and less equipment are used to accomplish more production in less time, and yet achieve higher quality in the fi nal product. The underlying objective of lean production is the elimination of various forms of waste, such as producing defective parts, excessive inventories, and workers waiting. Lean production is described in Sections 39.4 and 39.5 in our chap- ter on process planning and production control.
Six Sigma was started in the 1980s at Motorola Corporation in the United States.
The objective was to reduce variability in the company’s processes and products to increase customer satisfaction. Today, Six Sigma can be defi ned as “a quality-focused program that utilizes worker teams to accomplish projects aimed at improving an organization’s operational performance.”5 Six Sigma is discussed in more detail in Section 40.4.2.
Globalization and Outsourcing The world is becoming more and more inte- grated, creating an international economy in which barriers once established by national boundaries have been reduced or eliminated. This has enabled a freer fl ow of goods and services, capital, technology, and people among regions and countries.
Globalization is the term that describes this trend, which was recognized in the late 1980s and is now a dominant economic reality. Of interest here is that once under- developed nations such as China, India, and Mexico have developed their manufac- turing infrastructures and technologies to a level such that they are now important producers in the global economy. These countries have large populations, and there- fore large workforces, and low labor costs. Hourly wages are signifi cantly higher in the United States than in these countries, making it diffi cult for domestic U.S.
companies to compete in many products that require high labor content. Examples include garments, furniture, toys, and electronic consumer products. The result has been a loss of manufacturing jobs in the United States and a gain of related work to these countries.
Outsourcing is closely related to globalization. In manufacturing, outsourc- ing refers to the use of outside contractors to perform work that was traditionally
4 M. P. Groover, Work Systems and the Methods, Measurement, and Management of Work [8], p. 514. The term lean production was coined by researchers at the Massachusetts Institute of Technology who studied the production operations at Toyota and other automobile companies in the 1980s.
5 Ibid, p. 541.
accomplished in-house. Outsourcing can be done in several ways, including the use of local suppliers. In this case the jobs remain in the United States. Alternatively, U.S. companies can outsource to foreign countries, so that parts and products once made in the United States are now made outside the country. In this case U.S. jobs are displaced. Two possibilities can be distinguished: (1) offshore outsourcing, which refers to production in China or other overseas locations and transporting the items by cargo ship to the United States, and (2) near-shore outsourcing, which means the items are made in Canada, Mexico, or Central America and shipped by rail or truck into the United States.
Outsourcing has resulted in the growth of contract manufacturers, companies that specialize in producing parts, subassemblies, and/or products for other com- panies. Contract manufacturers have developed expertise and effi ciencies in cer- tain manufacturing operations, which means they can likely produce the contracted items at prices that are lower than the production costs of the customer company if it were the producer. Contract manufacturers include both domestic (U.S.) and foreign companies.6 Reasons why a company might prefer to use the services of a contract manufacturer include: (1) the company benefi ts from cost savings because it does not have to pay the factory expenses associated with production, (2) the company can focus its resources on design and marketing of products rather than manufacturing, and (3) the company may benefi t from skills possessed by the con- tract manufacturer but not by itself. On the other hand, there are risks associated with contract manufacturing by the customer company. In turning over its prod- uct designs it loses control over its intellectual property, which might result in the contract manufacturer becoming a competitor. The distinction between a contract manufacturer and a supplier is perhaps subtle. A supplier is usually thought of as a company that provides materials and components for a customer who is engaged in production of a product, whereas a contract manufacturer accomplishes the whole production of the product. It may use suppliers itself.
China is of particular interest in this discussion of globalization and outsourcing because of (1) its fast-growing economy (it now boasts the second largest gross domes- tic product in the world), (2) the importance of manufacturing in that economy, and (3) the extent to which U.S. companies have outsourced work to China. To take advan- tage of the low labor rates, many U.S. companies have moved much of their production to China (and other east Asian countries). Despite the logistics problems and costs of shipping the goods back into the United States, the result has been lower costs and higher profi ts for the outsourcing companies, as well as lower prices and a wider variety of available products for American consumers. The downside has been the loss of well-paying manufacturing jobs in the United States. Another consequence of U.S.
outsourcing to China has been a reduction in the relative contribution of the manufac- turing sector to GDP. In the 1990s, the manufacturing industries accounted for about 20% of GDP in the United States. Today, that contribution is only about 12%. At the same time, the manufacturing sector in China has grown (along with the rest of its economy), now accounting for about 35% of Chinese GDP.
Recently, there have been signs that outsourcing of production to China by American companies may be declining, and that manufacturing jobs are being brought back to the U.S. There are several reasons for this trend, which is called
6 The largest contract manufacturer at the time of this writing is Hon Hai Precision Industries (a.k.a.
Foxconn, headquartered in Taiwan, but many of its factories are located in China). It ranked 60th in the Fortune Global 500 with sales of $95 billion in 2010 (Fortune, July 25, 2011).
Section 1.6/Recent Developments in Manufacturing 31
reshoring. First, wage rates in China are increasing as the government attempts to evolve from an export-driven economy to a consumer-oriented economy, similar to the United States. Higher Chinese wage rates mean less advantage for U.S. compa- nies to offshore jobs to China. Second, logistics costs and delays involved in trans- porting products from China to North America are signifi cant, especially as oil prices increase. Accordingly, some companies, in their analyses of costs and benefi ts, have decided to produce in the United States, re-opening old factories or building new ones. On the other hand, U.S. companies producing goods for the Chinese market still have good reasons to keep their operations going in that country, just as Japanese and German automobile makers have established plants in the United States.
Environmentally Conscious Manufacturing An inherent feature of virtually all manufacturing processes is waste (Section 1.3.1). The most obvious examples are material removal processes, in which chips are removed from a starting workpiece to create the desired part geometry. Waste in one form or another is a by-product of nearly all production operations. Another unavoidable aspect of manufacturing is that power is required to accomplish any given process. Generating that power requires fossil fuels (at least in the United States and China), the burning of which results in pollution of the environment. At the end of the manufacturing sequence, a product is created that is sold to a customer. Ultimately, the product wears out and is disposed of, perhaps in some landfi ll, with the associated environmental degrada- tion. More and more attention is being paid by society to the environmental impact of human activities throughout the world and how modern civilization is using our natural resources at an unsustainable rate. Global warming is presently a major con- cern. The manufacturing industries contribute to these problems.
Environmentally conscious manufacturing refers to programs that seek to deter- mine the most effi cient use of materials and natural resources in production and minimize the negative consequences on the environment. Other terms for these pro- grams include green manufacturing and sustainable manufacturing. They all boil down to two basic approaches: (1) design products that minimize their environmen- tal impact and (2) design processes that are environmentally friendly.
Product design is the logical starting point in environmentally conscious manu- facturing. The term design for environment (DFE) is used for the techniques that attempt to consider environmental impact during product design prior to produc- tion. Considerations in DFE include (1) selecting materials that require minimum energy to produce, (2) selecting processes that minimize waste of materials and energy, (3) designing parts that can be recycled or reused, (4) designing products that can be readily disassembled to recover the parts, (5) designing products that minimize the use of hazardous and toxic materials, and (6) giving attention to how the product will be disposed of at the end of its useful life.
To a great degree, decisions made during design dictate the materials and processes that are used to make the product. These decisions limit the options available to the manufacturing departments to achieve sustainability. However, various approaches can be applied to make plant operations more environmentally friendly. They include (1) adopting good housekeeping practices—keeping the factory clean, (2) preventing pollutants from escaping into the environment (rivers and atmosphere), (3) minimiz- ing waste of materials in unit operations, (4) recycling rather than discarding waste materials, (5) using net shape processes, (6) using renewable energy sources when feasible, (7) maintaining production equipment so that it operates at maximum effi - ciency, and (8) investing in equipment that minimizes power requirements.